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Company says regrets downgrade, sees no impact on customers, employees.

Standard & Poor’s (S&P) on Thursday downgraded Eletson Holding’s debt to “SD" (shorthand for 'selective default'), one week after the company struck a forbearance agreement with a majority group of bondholders.

A full version of S&P’s rating decision was not immediately available. However, it follows a 15 February agreement between Eletson and bondholders representing 80% of owners of a 9.625% bond expiring in 2022 “to certain material terms and conditions of a proposed transaction that would enhance Eletson’s liquidity”, the company said in a press release.

The forbearance agreement, reached with certain guarantors and Deutsche Bank Trust Company Americas as trustee, “will allow the company and bondholders to finalise the terms of the proposed transaction,” the statement said without elaborating.

“It allows us to finalise the deal with our bondholders, which provides medium-term sustainability to our business, in line with our expectations for a product tanker recovery,” Kanelos said in the company statement.

In the statement, Eletson expressed "regret" at S&P’s downgrade and downplayed it.

“We understand it reflects standard rating agency protocol in such circumstances and the rating will revert once this process has been completed,” Kanelos said.

Employees, suppliers and customers would not be impacted during debt talks with bondholders, Eletson said. The talks also had no bearing on Eletson Gas, Eletson’s joint venture with Blackstone, it added.

As TradeWinds reported earlier this month, Eletson Corp's bond price slumped to a trading value around 52 cents on the dollar following a report that the Greek shipowner failed to make a 15 January coupon payment due on $300m worth of debt.

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Company says regrets downgrade, sees no impact on customers, employees.

Standard & Poor’s (S&P) on Thursday downgraded Eletson Holding’s debt to “SD" (shorthand for 'selective default'), one week after the company struck a forbearance agreement with a majority group of bondholders.

A full version of S&P’s rating decision was not immediately available. However, it follows a 15 February agreement between Eletson and bondholders representing 80% of owners of a 9.625% bond expiring in 2022 “to certain material terms and conditions of a proposed transaction that would enhance Eletson’s liquidity”, the company said in a press release.

The forbearance agreement, reached with certain guarantors and Deutsche Bank Trust Company Americas as trustee, “will allow the company and bondholders to finalise the terms of the proposed transaction,” the statement said without elaborating.

“It allows us to finalise the deal with our bondholders, which provides medium-term sustainability to our business, in line with our expectations for a product tanker recovery,” Kanelos said in the company statement.

In the statement, Eletson expressed "regret" at S&P’s downgrade and downplayed it.

“We understand it reflects standard rating agency protocol in such circumstances and the rating will revert once this process has been completed,” Kanelos said.

Employees, suppliers and customers would not be impacted during debt talks with bondholders, Eletson said. The talks also had no bearing on Eletson Gas, Eletson’s joint venture with Blackstone, it added.

As TradeWinds reported earlier this month, Eletson Corp's bond price slumped to a trading value around 52 cents on the dollar following a report that the Greek shipowner failed to make a 15 January coupon payment due on $300m worth of debt.